User:Mfenger/sandbox

'''Complete Plans for Small and Mid-Size Estates 11A: Plan for Married Couple With Adult Children Decisions and Implementation of Plan: At the First Death'''

As a way to show their love and affection for their grandchildren, Harold and Wendy decide to make a gift at the first death of $2500 to each grandchild. They recognize that there may be grandchildren born after the death of the first of them, in which case the survivor can make a lifetime gift to each later-born grandchild to put the later-born grandchild on an equal footing, to the maximum extent possible, with earlier-born grandchildren. As to any grandchild who has not attained the age of twenty-one (21), the bequest will be made to that grandchild's already established California Uniform Transfers to Minors Act (CUTMA) (Prob C §§3900-3925) account (discussed here) until the grandchild attains age 21. Harold and Wendy want their estate planning documents to be clear that adopted children such as David's son, George, will be treated in the same manner as natural born children.

The gift to any grandchild born after the first death will be distributed by the trustee to the decedent's surviving spouse, who is the custodian under CUTMA. Successor custodians are discussed here. Further, although they want the survivor of them to be able to continue making gifts to grandchildren, they do not wish to have it be a requirement, because the survivor may need these funds or the survivor may determine that gifts to the child who is the parent of the grandchild may be more appropriate at any given time. Gifts are discussed further here.

Other than a $2500 bequest to each then-living grandchild, all assets will pass to the survivor, provided, however, that the survivor will be given the ability to disclaim some assets, with the disclaimed assets passing to a Disclaimer Trust.

For assets not placed in the trust, i.e., the life insurance policy, the 401(k), pension and profit sharing plans, and IRA accounts, the spouse will be named as primary beneficiary. The trustee of the trust will be named as the alternate on the life insurance policy so that the proceeds will be paid out to the trustee and then be distributed according to the terms of the trust. There will not be any income tax consequence to distributing the life insurance proceeds to the trustee.

After considering the income tax consequences of distribution of the retirement benefits and the considerations (discussed here), Harold and Wendy decide that, after naming each other, they will name the trustee of the trust as the beneficiary.